FAQs

What are biofuels?

Can biofuels ever really replace oil?

Why do we need biofuels? Are we really running out of oil?

Are biofuels really green?

What is EROEI or net energy gain?

What does carbon-neutral mean?

What is cellulosic ethanol?

Do biofuels increase food prices and threaten to starve the poor?

What is AltraBiofuels’ competitive advantage?

Is there a biofuels bubble?

What are biofuels?

Biofuels are fuels derived from biomass. Today, biomass for energy production is most often associated with agricultural food crops like corn and sugarcane. When the starchy sugars in these food crops are fermented (meaning metabolized by yeast and bacteria) they produce high-energy alcohols like ethanol and butanol. These alcohols can be blended with gasoline or, with minor modifications to engine design, burned directly as fuel. (Some early studies suggest 100% butanol may even work in non-modified gas engines.)

In the case of biodiesel, various chemical processes – sometimes involving fermentation – convert oily feedstocks like soybeans, algae and even old cooking grease into biodiesel which can be blended with conventional diesel fuel or, with minor (and, in some cases, no) engine modifications burned directly in diesel engines.

But, the biomass needed for fermentation – the feedstock – is not only derived from food crops, but also increasingly from so-called energy crops such as switchgrass, sorghum, jatropha, michanthus and even from fast growing trees. Energy crops are relatively high in cellulosic sugars and low in lignin (the woody substance that's even tougher than cellulose).

Perhaps the most exciting development in biofuels has to do with releasing useable sugars from the “woody” parts of food and energy crops. (So, for example, from the parts of food crops we currently waste such as wheat straw, corn stover or sugar bagasse.) Cellulosic ethanol technologies use enzymatic processes to break down these complex “woody” or cellulosic sugars into sugars that can then be readily fermented. The economic and environmental gains made by converting biomass once viewed as waste -- or biomass from specialized energy crops -- into energy are dramatic.

Lastly, biomass is not just food or energy crops. Another promising set of technologies collectively referred to as TDP or thermal depolymerization breaks down complex organic materials like old tires, sewage and plastic into light crude oil by mimicking the natural processes that create hydrocarbons. So, even old tennis shoes, fan belts and pig manure are biomass that may soon yield cost-effective, clean energy.

Can biofuels ever really replace oil?

The amount of oil used in the U.S. – and worldwide – is staggeringly high. And, with China and India fast becoming mega-economies, demand is rapidly growing.

Biofuels can make a sizeable dent but true replacement of oil by any alternative energy source is, practically speaking, decades away.

There are nascent biofuel technologies such as algaculture (the cultivation of algae in wastewater to make biodiesel), thermal depolymerization (squeezing oil out of a myriad of complex feedstocks) and, above all, cellulosic ethanol that “on paper” have the potential to make huge contributions to our overall demand.

One study suggests that applying cellulosic technologies to a combination of agricultural waste (e.g., corn stover and wheat straw) and energy crops (e.g., switchgrass, sorghum and miscanthus) that U.S. gasoline demand could be met on 50 million acres of farm and prairie land or about 10% of the U.S. total! Read the study.

But, to achieve the twin goals of “energy independence” (cutting imports from countries willing to use oil as a potent economic weapon) and dramatically reduced CO2 emissions, we must not only bring a number of promising biofuel (and other) technologies online, but also apply the energy we use more wisely.

Why do we need biofuels? Are we really running out of oil?

Oil is a finite resource. Many experts suggest that oil production has already peaked. Others feel that new discoveries and enhanced recovery technologies can extend high volume production for many decades. Regardless, the now irrefutable evidence supporting global warming calls into question the wisdom of continuing to burn oil even if it were abundant; and, even if most of the reserves were not in the hands of countries only too willing to use it as an potent economic weapon.

Burning fossil fuels adds "new" CO2 captured and stored by plants millions of years ago into the atmosphere. Adding huge volumes of “new” CO2 from the past to the CO2 that is already in the atmosphere is widely recognized as the primary cause of global warming. Pursued correctly, biofuels have the potential to be carbon-neutral (releasing little or no new CO2) into the atmosphere.

Read a study about the ability of different biofuels to help reduce CO2 emissions.

Are biofuels really green?

When biofuels are pursued with a smart end-to-end or so-called field-to-wheel orientation pleasantly green results can be achieved.

A true field-to-wheel orientation not only considers how much energy it takes to produce the biofuel, but also how much water and land are used as well as how much incremental CO2 is added to the atmosphere through both the production and burning of the fuel.

Let’s start with ethanol derived from corn. It’s greener than big oil companies and their hired guns want you to believe (read vastly greener than oil itself),but there’s a lot of room for improvement. For example, growing the corn using fertilizer that is a bi-product of the ethanol brewing process (instead of from natural gas or petroleum): using farm machinery partially powered by ethanol or biodiesel; transporting the corn to the ethanol plant in trucks partially powered by ethanol or biodiesel; using corn stover (cobs and stalks) as the heat source to brew and distill the ethanol; using water-efficient production processes (now widely practiced); and, distributing the ethanol once again using trucks partially powered by ethanol or biodiesel all adds up to a pretty green process.

According to studies by the NRDC (Natural Resources Defense Council) and the EPA, corn ethanol produced with even a modicum of field-to-wheel sensibility ranges from 20% to 30% better than gasoline in terms of introducing new CO2 into the atmosphere.

The process becomes far greener if the “woody” parts of the corn plant rich in cellulose are used not only as a heat source to cook and distill the ethanol but also as the feedstock to produce ethanol (see cellulosic ethanol). In this scenario, material once wasted is used to make fuel. That means fewer new acres under plow (less habitat loss), no new water required for new acreage and, even though the CO2 released by rotting, wasted corn stalks is arguably reused by a new crop of corn, it is better to see that CO2 released as spent fuel because it further reduces the introduction of new CO2 from fossil fuels.

By applying cellulosic technology to specialized energy crops such as miscanthus, switchgrass, and sorghum, a whole new shade of green is achieved. These crops demand little fertilizer and when used in the right rotation, actually augment the soil. And, many use little water and are able to thrive on land where food crops cannot. All the energy crops are energy dense meaning the gallons of fuel they yield per acre of land are very high.

Lastly, some scientists have recently suggested that ethanol will worsen certain unhealthy components of urban smog. (This, despite the fact that ethanol was first added to gasoline years ago to reduce smog!) Regardless, the sensational organic chemistry debate is largely moot. Any biofuels producer that aspires to deliver both energy independence and environmental improvements knows that biofuels are only part of the solution. Conservation – the more efficient and intelligent use of energy – must simultaneously be embraced.

Smartly produced biofuels and energy conservation can deliver a future that supports sustainable economic growth, averts the worst of global warming and, preserves the beauty and biodiversity of the planet we share. Environmental groups ranging from the World Wildlife Fund, Green Peace, the Sierra Club and the NRDC are starting to agree.

Read a study about the ability of different biofuels to help reduce CO2 emissions.

What is EROEI or net energy gain?

EROEI (Energy Returned on Energy Invested or Net Energy Gain) is a flavor of cost accounting applied to energy production that considers the “well-to-wheel” or in the case of biofuels, field-to-wheel energy inputs required to produce and distribute fuels to end-users.

So, for example, the energy inputs used to grow corn including the petroleum based fertilizers, the fuel used by the farm equipment, the fuel used to transport the corn to the ethanol plant, the heat required to brew and distill the ethanol and the energy required to transport the ethanol to market all come to bear in this accounting process.

Consumers are often surprised to learn that many fuels – including oil from older oil fields or from far-away lands – often exhibit 1:1 or even slightly negative net energy gains. In layman’s terms this means it takes a lot of calories – a lot of energy – to produce and deliver the calories we use in our gas tanks. At a 1:1 ratio, it takes an equal mount of energy input to produce and distribute the energy that’s ultimately used (so, more simply still, at a 1:1 ratio it takes the energy in a gallon of gas to produce and distribute a gallon of gas). Today, using relatively inefficient processes, corn ethanol is widely thought to deliver between a 1:1 and a 1:1.2 net energy gain, making it on par or better than most oil. Recent developments in cellulosic ethanol stand to dramatically increase EROEI because using agricultural waste and energy crops improves energy density (the amount of useable energy that can be produced from an acre of land).

What does carbon-neutral mean?

When a fossil fuel is burned, it releases carbon (as carbon dioxide or CO2) that was used by plants millions of years ago. This CO2 trapped (or, as scientists call it “fixed”) by the ancient plants as part of photosynthesis is released when fossil fuels are burned and added to the CO2 currently in the atmosphere. By aggressively burning fossil fuels over the past 150 years, humans have added a huge amount of “new” CO2 to Earth’s atmosphere. This CO2 is now widely understood to be the cause of global warming.

Biofuels are said to be “carbon-neutral” because the next crop of biofuel feedstock (corn, sugarcane, etc.) grown captures the same amount of CO2 from the prior crop of biofuel feedstock that was produced and burned as fuel.

If, however, a fossil fuel is used as the heat source to brew and distill a biofuel (as is commonly the case today), then unwanted “new” or incremental CO2 emissions creep into the picture. To be optimally “carbon neutral,” the entire biofuel production process must be considered: the heat used to brew and distill the biofuel should, ideally, be derived from biomass like sugarcane bagasse or corn stover; the farm machinery used to plant, maintain and harvest the feedstock should be running on biofuels/biofuels blends; the tanker trucks used to transport the feedstock to the plant and later to the end-users should be running on biofuels; and, even the fertilizer used to help grow the feedstock should be a bi-product of the biofuels’ production.

In a society where fossil fuels will still be used for decades to come, a truly carbon-neutral position is hard to achieve, but smart field-to-wheel biofuels processes can greatly reduce the amount of new CO2 entering our atmosphere and are humankinds’ best available weapon to at once prosper and fight global warming.

What is cellulosic ethanol?

Even the best agricultural feedstocks like sugarcane have much of their biomass’ potential energy locked up in the “woody” parts of the plant. The sugars in this part of the plant – the cellulose – are complex (known as polysaccharides) and are protected by an even tougher substance known as lignin. The fermentation organisms and process widely used today cannot convert the polysaccharides in cellulose into useable sugars. Several promising new technologies are being tested and rapidly commercialized. By making uses of plant material once viewed as waste, EROEI (energy returned on energy invested) improves, food prices are not bid up; and, carbon-neutral goals are advanced (limited new CO2 is released).

Do biofuels increase food prices and threaten to starve the poor?

Biofuels made directly from the parts of plants used for food can, in the short-term, affect supply such that food prices increase. But, as Econ 101 tells us, increased demand quickly gives rise to increased supply (with, for example, more corn acres planted in 2007 than at anytime since WWII).

That said, no serious biofuels producer wants to see the entire country tilled and planted with corn. Cellulosic technologies that turn agricultural waste (e.g., leftover corn cobs and stalks) and “woody” energy crops into ethanol are rapidly being brought into production. The move toward cellulosic ethanol clearly takes some of the pressure off of food crops or, more accurately, the parts of crops used for food. Energy crops often use land that is unsuited for food crops (and so do not take food out of production) and, in fact, can be planted in regular rotation with food crops to enhance soil.

As per biofuels starving the poor, two things should be noted. First, many developing countries have long encouraged the U.S. to stop exporting cheap, subsidized grains because it hurts their own agricultural development. Higher domestic grain prices – to the extent that biofuels will even cause them – certainly act to slow the grain “dumping” developing countries have uniformly lamented. Second, many developing countries are ideally suited for the production of drought-tolerant energy crops. This gives them a new cash crop that doesn’t chew up the land base they need to grow food. In this vein, several recent studies have argued that biofuels may be a boon to the developing world.

Read an article on why biofuels won’t drive up food prices and may help developing countries.

What is AltraBiofuels’ competitive advantage?

The AltraBiofuel team's skill at filtering technologies to quickly determine which warrant further investigation and which can ultimately be placed into profitable, environmentally-sound production is a significant competitive advantage in a field that is deluged with innovations.

Put differently, projecting an entrepreneur's – or, even in-house – "lab results" into scalable, eco-sound production requires both high level engineering skills plus the sharp pencils and jaundiced eyes of experienced businesspeople. Altrabiofuels has the skill set -- the right combination of engineering and business acumen -- to win.

Another Altrabiofuels advantage has to do with a commitment to securing long term supplies of locally produced feedstocks that are relatively immune to the price fluctuations of the commodities markets. And, of course, to quickly bringing smart cellulosic technologies into production to further reduce feedstock risks and advance environmentally sound carbon-neutral goals.

Is there a biofuels bubble?

The biofuels arena is rife with innovations and the speculation that accompanies them. This emerging industry is also bolstered with government subsidies that are important to encourage investments, but can also give companies and their investors a false sense of financial stability. Moreover, the price of today's feedstocks (mostly corn) can be quite volatile. Does this add up to a bubble? It's hard to say. What seems clear is that biofuels companies that are not careful about vetting technologies, investing huge, production-level capital and securing predictable supplies of affordable feedstocks may be short-term players. By the same token, biofuels companies that make prudent technical and financial decisions may soon be in a position to favorably acquire a number of distressed biofuels assets. Bottom-line: for the next few years, the biofuels arena will be characterized by the heightened risks and rewards typically associated with the emergence of any promising new industry.